The Securities and Exchange Board of India (SEBI) has released a Master Circular for ESG Rating Providers (ERPs), effective July 11, 2025. This circular compiles existing guidelines and procedural requirements for ERPs, which are regulated under the SEBI (Credit Rating Agencies) Regulations, 1999, as amended. The consolidation aims to provide a single, comprehensive reference for all stakeholders, including ERPs, listed entities, stock exchanges, and depositories. The Master Circular outlines general obligations, compliance mandates, and the necessary systems and infrastructure ERPs must maintain. While it supersedes previous individual circulars, any actions taken, applications made, or obligations incurred under those prior circulars remain valid. SEBI emphasizes that the Boards of Directors of ERPs are responsible for ensuring adherence to these new provisions. The circular’s monitoring will be conducted through the yearly internal audits mandated for ERPs. This measure is intended to protect investor interests and regulate the securities market more effectively.
Securities and Exchange Board of India
MASTER CIRCULAR FOR ESG RATING PROVIDERS
Master Circular No. SEBI/HO/DDHS/DDHS-POD-2/P/CIR/2025/100 Dated: July 11, 2025
To,
All Registered ESG Rating Providers,
All Listed Entities,
All Recognized Stock Exchanges,
All Registered Depositories
Madam / Sir,
Subject: Master Circular for ESG Rating Providers (“ERPs”)
I. ESG Rating Providers are regulated under the provisions of Securities and Exchange Board of India (Credit Rating Agencies) Regulations, 1999 (“CRA Regulations” as amended with effect from July 4, 2023) that inter-alia prescribe guidelines for registration of ERPs, general obligations of ERPs, manner of inspection and code of conduct applicable to ERPs.
II. While the broad framework for ERPs has been laid down in the CRA Regulations, the procedural/ disclosure requirements and obligations are being specified through this Master Circular, which will enable the industry and other users to have access to all the applicable directions to ERPs at one place.
III. ERPs are directed to comply with the conditions laid down in this master circular. Also, ERPs shall have necessary systems and infrastructure in place for implementation of this circular. The Board of Directors of the ERP shall be responsible for ensuring compliance with these provisions.
IV. This Master Circular is a compilation of the existing circulars as on date, with consequent changes. Accordingly, the list of existing circulars for ERPs which have been superseded by this Master Circular is placed at Appendix.
V. Notwithstanding such rescission-
a. anything done or any action taken or purported to have been done or taken under the rescinded circulars, prior to such rescission, shall be deemed to have been done or taken under the corresponding provisions of this Master Circular;
b. any application made to the Board under the rescinded circulars, prior to such rescission, and pending before it shall be deemed to have been made under the corresponding provisions of this Master Circular;
c. the previous operation of the rescinded circulars or anything duly done or suffered thereunder, any right, privilege, obligation or liability acquired, accrued or incurred under the rescinded circulars, any penalty, incurred in respect of any violation committed against the rescinded circulars, or any investigation, legal proceeding or remedy in respect of any such right, privilege, obligation, liability, penalty as aforesaid, shall remain unaffected as if the rescinded circulars have never been rescinded.
VI. This circular is issued in exercise of the powers conferred by Section 11 (1) of Securities and Exchange Board of India Act, 1992 read with the provisions of Regulation 28H of CRA Regulations, to protect the interest of investors in securities, to promote the development of, and to regulate, the securities market.
VII. Applicability: The provisions of the Master Circular shall come into force with immediate effect from the date of notification of this Master Circular. For the purpose of this Circular, “listed entity” shall have the same meaning as provided in Regulation 2(1)(p) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.
VIII. Monitoring: Monitoring of provisions of this circular shall be done in terms of the yearly internal audit for ERPs, mandated under Regulation 28S of the CRA Regulations and this master circular issued thereunder.
IX. This Circular is being issued with the approval of Competent Authority.
X. This Circular is available on SEBI website at sebi.gov.in under “Legal Framework”.
Yours faithfully,
Ritesh Nandwani
Deputy General Manager
Department of Debt and Hybrid Securities
Tel No.022-2644-9696
Email ID – riteshn@sebi.gov.in
